Desperate times

Mark Scott is sitting on a wall behind the Reiss Hotel, finishing up a beer. The Reiss' sister hotels, the Pine and the Brunswick, are within throwing distance, and Scott's lived in both. Unlike the brick-built Reiss, the Pine and Brunswick are dilapidated wood structures that Scott compares to tenement houses, but he also speaks fondly of a woman named Vivian who used to manage the front desk at the Brunswick.

“She would help people out, give them days on their rent” if they were short on cash, he says. He's considering moving in to the Reiss and urges a reporter to “write something good” about the place.

At least eight former tenants don't share Scott's fondness. In 2008, they filed a lawsuit against San Diego Progressive Urban Development (SDPUD), which owns the three residential hotels, alleging that at least as far back as 2004, conditions there verged on unlivable. The shared bathrooms were moldy and poorly kept; showers and toilets, the complaint alleges, “were regularly backed up and filthy.” During winter months, the complaint says, the hotels failed to provide adequate heat and discouraged individual space heaters, telling tenants that the devices would short out the electrical system. And, when tenants complained, the lawsuit alleges, they were threatened with eviction and, at least for one plaintiff, immediately turned out on the street.

Matthew Miller, the tenants' attorney, was moving ahead with a class-action lawsuit when SDPUD agreed to settle. Under the terms of the settlement, SDPUD claims no liability but will provide limited cash payments to anyone who lived in the three hotels between Aug. 22, 2004, and Oct. 14, 2010 (a notice of the settlement appeared as an advertisement in CityBeat's Feb. 9 issue). The settlement says SDPUD must ensure that all heating units are operational and hotel managers must provide tenants with extra blankets from November through April. The property owner has three months from the date when the settlement's approved—expected to happen in April—to make necessary repairs to the buildings.

CityBeat tried to contact SDPUD's principal, John Caparell, through his law-office phone number, which rang without connecting to voicemail. The Pine has no listed phone number. No one answered the phone at the Brunswick, and the person answering the phone at the Reiss—also listed as SDPUD's number—said the best way to contact Caparell is to write a letter.

Residential hotels like the Pine, Reiss and Brunswick are sometimes referred to as the housing of last resort for folks on very low incomes. The locations Miller chose to have former tenants pick up claim forms—the Neil Good Day Center and Water Man Check-In Center (the Downtown storage facility where homeless people can store their possessions)— underscore this. While not everyone who's filed a claim with Miller is currently homeless, a good majority are, or have been.

Former tenant Allana Gorobets, for instance, evicted in May 2007 after living at the Reiss for four months, ended up in a homeless shelter for a month. As Miller puts it in the complaint, the hotels “don't house businessmen, visiting baseball teams or tourists—instead, most of their tenants are teetering on the brink of homelessness.”

While Miller hasn't formally investigated other residential hotels, he's heard anecdotally from his clients that what allegedly went on at the Reiss, Pine and Brunswick isn't unique.

“You hear the same stories,” he says.

The need to protect tenants and preserve and maintain residential hotels— buildings that are 70, 80, even 100 or more years old—has been articulated in state and local laws. Exactly how to do it isn't clear. The city's own single-room-occupancy (SRO) ordinance, for instance, requires that owners who convert or demolish residential hotel units replace those lost units—but a loophole in state law has allowed the majority of Downtown's SRO owners to exempt themselves from the ordinance.

Tony Khalil, a senior engineer with the city's Neighborhood Code Compliance Department, says there's no formal monitoring process for the city's aging SRO stock, and inspections are largely complaint-driven. And though complaints are anonymous, he says, it's not difficult for a property manager to figure out who complained.

A couple of years ago, Khalil says, his department conducted basic inspections of all Downtown SROs, prompted by complaints about habitability and fire safety. He says they opened cases on buildings that had problems, and all of those cases have since been closed.

But that doesn't mean the buildings are up to current codes.

“Most of them aren't even close to code just because of the grandfathering,” says Susan Tinsky, executive director of the San Diego Housing Federation.

And, she says, “once you have to start doing improvements, then the property owner is going to want to recoup that money somehow, so generally that will be through an increase in the rent.”

In 2006, the Centre City Development Corp., which oversees redevelopment Downtown, loaned $1.6 million to the owner of the southern Hotel to pay for rehabilitation. In exchange, rents must remain affordable to low-income earners for the next 55 years, even if the hotel changes hands.

When the city raised the cap on the amount of money Downtown can spend on redevelopment, Tinsky pressed publicly for funding to rehab older residential hotels.

“We still have this housing stock that's Downtown; it's in private hands, and there's potential danger of losing that, if not to market forces then certainly to deterioration,” she told CityBeat in December. “Most of these are unreinforcedmasonry construction. They're old. They're obsolete.”

But the future of redevelopment is in limbo with Gov. Jerry Brown's proposal to eliminate it statewide. The city, meanwhile, has cobbled together an affordable-housingheavy list of projects for which it hopes to lock in funding ahead of Brown's plan, though critics question whether such a move is legal. Included in the list is more than $3.8 million to rehab the Churchill, a long-empty SRO that's been the subject of a protracted legal battle after the owner evicted tenants in 2005.

Tinsky thinks there's at least one local funding source that could be used to rehab residential hotels.

“There are pots of money” that can be used for such purposes, she says. Community Development Block Grants, awarded to the city by the federal Department of Housing and Urban Development, are intended to eliminate blight and address “urgent” health and safety issues. “The purpose of CDBG is really these types of things,” she says. “It's really intended to support affordable housing. You can give small grants to assist property owners without putting any restrictions on the actual units themselves.”

Catherine Rodman, an attorney who focuses on affordable housing, pointed to a tax the city charges owners of rental units—which generates roughly $6 million a year—as another potential funding source.

“If you took $6 million a year and put it toward code enforcement and rehab of rental units, you'd have the problem solved in the time it took them to declare an emergency in 2002 until now,” she says. “All rental units don't need rehab, and some need minor. I know it's scarce resources, but what's more important than a person's home?”

The “emergency” Rodman refers to is the Housing State of Emergency the city declared in August 2002 due to a citywide lack of affordable housing. The City Council has renewed the state of emergency every month since then.

“It's been meaningless,” Tinsky says.

“And all they do is say it's still an emergency,” Rodman says. “Well, why the hell do they think it's an emergency? Why don't they do something about it? Just renewing, what, for nine years now, a state of emergency? That's become ludicrous.”